IT Jobs Report November

It’s pretty clear that “The jobs market is facing a cyclical challenge – there are IT candidates out there who want to work, and there’s a decent availability of candidates, but they often do not have the right skills for the roles on offer” says Claire Warnes, Partner, Skills and Productivity at KPMG UK. 

This means higher starting salaries are still being offered as businesses compete in the ongoing battle for talent. “And while the rate of decline in permanent placements is the weakest since June – this follows more than a year of cautious hiring due to economic uncertainty and means many businesses are unable to commit to long-term strategies and instead are having to focus on the here and now, by employing temps.

The sharper rise in available candidates is good news for recruiters, but this comes at the expense of employers who are making more redundancies as they tighten budgets due to ongoing high inflation. “Looking across sectors, healthcare as ever is experiencing a mismatch in supply and demand – there are fewer clinical professionals available to manage a very busy service as we head into winter.

While permanent workers are the panacea, this is where temporary contracts continue to provide the means to deploy skilled staff at short notice, but at a higher cost. “With a weak economic outlook for the months ahead, employers will be hoping next year will bring the expected easing of inflation so they can focus on delivering growth for their businesses.” Neil Carberry, REC Chief Executive, said: “In many ways, the labour market is marking time waiting for the brakes to be taken off growth by the Bank of England.

While permanent hiring is now declining more softly, temporary hiring continues to pick up the slack – with billings gently growing for most of this year on the back of rising wages. While the rate of pay growth has now returned to more normal parameters, it is still strong, especially in sectors where staff remain in short supply.

That sectoral split is ever more pronounced, with challenging sectors like construction and IT sitting in a very different place to hospitality and healthcare, which continue to be affected by shortages.

The main findings for October are:

Permanent placements fall at softest pace since June

The latest recruitment survey signalled that a cautious hiring environment persisted across the UK during October. Notably, uncertainty around the economic outlook contributed to the thirteenth successive monthly reduction in permanent staff hires, albeit with the rate of decline easing to the weakest since June.

At the same time, there was a back-to-back rise in temp billings as some employers preferred the flexibility of short-term staff in the current climate.

Sharper rise in overall candidate supply

The availability of candidates improved for the eighth straight month in October, and at a much sharper rate than in September. This was due to an accelerated upturn in permanent candidate numbers, as temp staff supply rose at a slightly softer (but still marked) pace.

There were frequent reports that redundancies and subdued hiring activity had contributed to the latest increase in staff availability.

Starting salary inflation slips to 31-month low

Permanent starters’ pay remained on an upward trend in October, though the rate of increase moderated to the weakest in just over two-and-a-half years.

Nevertheless, the rate of salary inflation remained sharp and was in line with the series average. Recruiters often mentioned that employers had to up pay offers to secure suitably-skilled staff and to reflect the higher cost of living.

Temp wages also increased, though the rate of growth held close to September’s recent low. Demand for staff stabilises in October Following a slight reduction in September, overall demand for staff stabilised in October.

Underlying data highlighted that permanent vacancies fell only fractionally, while the number of temp positions increased modestly. That said, the latter marked the second-softest improvement in demand for short-term workers since January 2021.

IT Jobs in Demand

CAD

Developers

IT Directors

IT Helpdesk Support

Software Engineers